If you have been involved in adjudications it is likely that at some stage the submission of new evidence has arisen, and if you are the responding party it can often feel like an ambush.
The responding party will often raise the argument that no dispute has crystallised as they were unaware of the evidence before the adjudication was commenced. For example, a sub-contractor believes it is entitled to an extension of time and submits the relevant application. The main contactor fails to grant an extension of time and a dispute arises between the parties. The sub-contractor starts an adjudication but having sought advice from a delay expert, a delay report is then produced for the first time to support the contractor‘s position.
In the recent case of MW High Tech Project UK Limited -v- Balfour Beatty Kilpatrick Limited [2020], Balfour Beatty was engaged to carry out mechanical and electrical services under a JCT Design and Build Sub-contact 2011. Balfour Beatty made numerous applications for an extension of time. MW did not respond to the applications. Balfour Beatty served a delay report including a new cause of delay and asked for a response within 7 days. No response was received, so 8 days later, Balfour Beatty commenced an adjudication. Balfour Beatty was successful and the adjudicator awarded it the full extension of time.
MW High Tech took issue with the adjudicator‘s decision on the basis that the contract allowed MW High Tech up to 16 weeks to consider an extension of time claim. MW High Tech argued that the service of the delay report was a fresh notification of a claim and that no dispute could have crystallised until it had at least had a reasonable time to consider it. In MW High Tech’s opinion, 8 days fell short of what it believed to be a reasonable period.
MW High Tech started legal proceedings seeking a declaration that the adjudicator did not have jurisdiction to decide this dispute. The key issue faced by the Court was whether the submission of an expert report was supplemental to an existing claim or whether it gave rise to a new claim.
The Judge concluded that the expert report did not amount to a fresh notification as it was supplemental to the existing claim already known to MW High Tech. MW High Tech’s challenge was rejected and the Judge gave a declaration that the adjudicator’s decision was valid and binding.
Overall, the judgment serves as reminder to all those involved in adjudication that a last minute expert report, containing new information, will not necessarily deprive an adjudicator of jurisdiction if it is supplemental to a dispute that has crystallised. Parties to adjudication have become creative in the way they seek to resist enforcement, but the Courts have been quick to support the adjudication process and continue to make it increasingly difficult for a ‘no crystallised dispute’ jurisdictional challenge to be successful.